Shares of NuScale Power, a developer of small modular nuclear reactors (SMRs), plummeted 19.77% in pre-market trading on Monday, caught up in a broader selloff of tech stocks following news that a Chinese AI startup, DeepSeek, has developed a powerful AI model that can run on cheaper, less advanced chips.

DeepSeek's claims have raised doubts about the sustainability of the AI supply chain, which has been fueled by massive investments from major tech companies like Nvidia in advanced chips and data center infrastructure to support the development of AI systems like ChatGPT.

While NuScale Power is not directly involved in the AI chip industry, the company's fortunes are indirectly tied to the growth of AI applications due to the expected surge in energy demand from data centers. If DeepSeek's model proves to be as efficient as claimed, it could potentially reduce the energy requirements of AI systems, impacting the growth prospects of companies like NuScale Power that are banking on the increasing adoption of nuclear energy to power data centers.

NuScale Power is currently the only company to have secured a Standard Design Approval from the U.S. Nuclear Regulatory Commission for its 50-megawatt electric (MWe) SMR. The company has partnered with Standard Power to develop two facilities in Ohio and Pennsylvania, with plans to build 24 units of its 77 MWe modules, producing a total of 1,848 MWe of energy.

However, the deployment of NuScale Power's SMR technology is still years away, and the company faces challenges in terms of regulatory approvals, potential cost overruns, and the need to demonstrate the cost-effectiveness of its technology compared to traditional nuclear power plants.